Tax breaks and incentives will be considered in the next period as the current system operates with little or no social criteria, resulting in favoring economically strong social groups as well as tax evaders.

The tax credits to date are 1,047 and in fact, over the two years of the pandemic, they have been inflated to support taxpayers and businesses, and their value has jumped to 12.9 billion euros. It is the intention of the finance staff to change the way in which tax credits and benefits are provided in line with the practice in Europe. It is noted that our country has one of the highest rates of tax benefits among the EU countries.

According to the Ministry of Finance, tax credits account for 26.7% of tax receipts, with some deductions that cannot be taken into account, such as inheritances and gambling winnings, as they are not computerized, meaning that the cost is much higher and not is quantifiable. .

The above data, as well as the fact that almost 7 out of 10 taxpayers declare incomes not exceeding 10,000 euros, indicates not only the concealment of taxable material, but also the fact that benefits and benefits are aimed at those groups that evade declaration their actual income. . In this regard, the government will revise the tax credits and exemptions from scratch, while beginning the process of checking and registering all tax credits electronically so that they can be verified in terms of their cost to the budget and the number of taxpayers they concern. With.

In this way, disparate tax spending will be reviewed and, in some cases, “permanent” incentives will be created that will mainly strengthen weaker social groups and investments.

Some of the tax incentives in place today, although introduced to help those who start businesses, tend to distort the system as many take advantage of them while hiding their true income. The legislation provides for a reduced income tax rate of 50% during the first three years of operation of the enterprise, if the income does not exceed 10,000 euros. At the same time, there is a five-year exemption from the fee for pretense and a tax advance reduced by 50%. The above measures help to support those who start a business, but create conditions for declaring low incomes, not exceeding 10,000 euros, in order to maintain a preferential tax regime. There are more than half a million (618,000 people) self-employed in Greece, and the figures show that although they have a turnover of about 40 billion euros, their declared profit is only 3.5 billion euros. In this context, the government has asked IOBE to prepare a study with proposals for reforming the self-employed taxation system.

In terms of benefits, the intention of the government is that the amounts deposited in beneficiaries’ accounts, in percentage terms, more than 50% be spent with the card. This measure has already begun and is expected to be extended to all benefits granted today.

12.9 billion cost the state

According to data presented to Parliament, tax breaks now stand at 1,047, compared to 716 in 2016, pushing the Greek state’s spending to $12.9 billion. Among the most important:
1. Personal income tax (200 exemptions and deductions). According to the data, the tax benefits used by individuals exceed 10 million cases, and the costs for the budget are estimated at 5 billion euros. The largest part, namely 3.8 billion euros, concerns the tax-free limit and tax reductions depending on the size of the family (parents and children). The tax credit was used in 6.7 million cases.
2. Corporate income tax (200 exemptions and deductions). 53,021 companies received benefits worth 1.3 billion euros.
3. Taxation of capital (129 deductions and exemptions): a total of 5,082,163 individuals and entities had deductions for ENFIA, special property tax, transfers, parental benefits, inheritances and donations in the amount of 3.89 billion euros. Especially in ENFIA, exceptions cover more than 5 million cases, while the benefit is relatively small, namely 85 million euros.
4. VAT (75 discounts and tax benefits). The benefit for businesses, professionals and consumers amounted to 821.934 million euros. Private educational services have the biggest tax breaks, saving 397 million euros.
5. Stamp duty (85 deductions). The benefits amounted to 73.7 million euros.
6. Premium tax. The reductions reached 421.9 million euros.
7. Special tax on consumption (44 tax breaks). The amount of benefits amounted to 1.17 billion euros, of which the lion’s share falls on energy products for 589.6 million euros and ethyl alcohol and alcoholic beverages for 580.4 million euros.
8. Vehicle registration fees (23 exceptions). Discounts amounted to 121.69 million euros.
9. Payment for the passage of vehicles. The amount of benefits amounted to 11.844 million euros.